In this chapter, we examine broader environmental and natural resource open-access problems that cross political jurisdictions. To get insights into what opportunities and challenges exist for the use of environmental markets, we examine case studies where multi-jurisdictional environmental markets have been implemented and where they have not. The nature of the underlying property rights helps to explain the differences in the potential for markets.

In earlier chapters, the analysis and examples indicated that environmental markets appear to work best when addressing more localized open-access problems that are narrow in scope, where property rights are secure, and where the parties involved share common incentives regarding resource conservation. Because immediate users often are both the source and the solution to the problem, they are more likely to internalize the costs and benefits of resolving it. At the local level, the costs of measuring and bounding environmental assets and demarcating property rights are generally lower. Moreover, confined open-access problems typically fall under a single political authority. In this situation, property rights, markets, and any distributional or administrative conflicts surrounding them are handled by politicians and bureaucratic officials who are at least loosely responsible to local political constituencies. Parties with more actual experience with the resource typically have the best information about it, the losses due to open access, the effects of human actions relative to more system-wide factors, and potential remedies.